Omega Elevators Having Reg. Office Thr. vs State Of Madhya Pradesh And Others

Writ jurisdiction of this Court under Article 226 of Constitution is invoked assailing Notice Inviting Tender ('NIT' for brevity) vide P/1 dated

17/12/2019 issued by respondent No.1 for the work of supply, installation, testing, commissioning and maintenance of lifts including allied works under

PMAY at Mahal Gaon Ki Pahadi and Manpur, Gwalior (M.P.) valued at Rs.1460.60 Lacs to be completed within six months including rainy season.

Learned counsel for rival parties are heard on the question of admission.

The challenge to the aforesaid NIT is to the extent it restricts the right to bid to a limited number of companies manufacturing lifts thereby and in

the process excluding the petitioner who claims itself to be a sole proprietorship involved in manufacturing lifts. It is submitted by learned counsel for

the petitioner that the petitioner is otherwise eligible to participate in the NIT from all aspects but only on account of the said restrictive bidding invited

by the respondent his right to participate is taken away.

Learned counsel for the petitioner has relied upon various cases in support of his contention including Punjab Drugs Manufacturers Association

Vs. State of Punjab and others reported in (1988) 2 ILR (Punjab & Haryana) 540, State of Punjab Vs. Senior Vocational Staff Ministers

Association reported in (2017) 9 SCC 379, Aashirwad Films Vs. Union of India and Others reported in (2007) 6 SCC 624 ,Union of India

and Others Vs. N.S. Rathnam and Sons reported in (2015) 10 SCC 681, Ramana Dayaram Shetty Vs. International Airport Authority of

India and Others reported in (1979) 3 SCC 489, M/s. Erusian Equipment & Chemicals Ltd and Union of India and Others reported in

(1975) 1 SCC 70.

Learned counsel for respondent on the other hand by relying upon the decision of Apex Court in Global Energy Ltd and Another Vs. Adani

Exports Ltd and Others reported in (2005) 4 SCC 435 (Para 9 & 10) submits that 10 most reputed companies/firms manufacturing lifts/elevators

had been earmarked for inviting bid in the said work. It is further submitted that this step was taken to ensure quality service in the future. It is also

submitted that this was essential as the lifts/elevators are amenable to accidents/breakages if there is anything amiss in the manufacturing, installation

and the process of rendering service. Accident can cause damage to life and property of citizens. Looking to this aspect, the 10 most reputed

manufacturers of lifts/elevators were shortlisted from whom the bids would be invited to ensure that among the best among the best among the best is

chosen to undertake the work in question.

It is seen from the record that these 10 companies of manufacturing lifts/elevators are companies of repute in the field of

manufacturing, installation & service of lifts. If the tender was kept open for all and sundry to apply and participate, the process would have been not

only cumbersome but also time consuming thereby delaying the work which has a time schedule for execution coupled with the fact that the possibility

of an inferior quality manufacturers on the strength of lower bid getting selected could not have been ruled out. Thus, the act of the respondents in

issuing NIT restricting right to bid to certain reputed companies in the field of manufacturing, installation and service of lifts/elevators serves a larger

public interest and therefore, is saved from being sacrificed at the alter of Article 14 of the Constitution notwithstanding it excludes few other lifts

manufacturers (including petitioner) who may be as competent or less competent than the 10 chosen companies/firms.

The view of this Court gets bolstered by the decision of Apex court in Global Energy Ltd and Another (Supra), relevant extract of which is

reproduced below for ready reference and convenience:-

In Tata Cellular v. Union of India (AIR 1996 SC 11), a Three Judge Bench has explained what is a tender and what are the requisites of a valid tender. It has been

held that the tender must be unconditional and must conform to the terms of the obligation and further the person by whom the tender is made must be able and

willing to perform his obligations. It has been further held that the terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender

is in the realm of contract. In Air India Ltd. v. Cochin International Airport Ltd. (2000 (2) SCC 617), the same view was reiterated that the State can fix its own terms of

invitation of tender and that it is not open to judicial scrutiny. Whether and in what conditions the terms of a notice inviting tenders can be a subject matter of judicial

scrutiny, has been examined in considerable detail in Directorate of Education v. Educomp Datamatics Ltd. (2004(4) SCC 19). The Directorate of Education,

Government of National Capital Territory of Delhi had taken a decision to establish computer laboratories in all Government schools in NCT area and tenders were

invited to provide hardware for this purpose. For the final phase of 2002-03, tenders were called for 748 schools and the cost of project was approx. Rs.100 crores. In

view of the difficulty faced in the earlier years where the lowest tenderers were not able to implement the entire project, a decision was taken to invite tenders from

firms having a turnover of Rs.20 crores or more for the last three financial years ending with 31.3.2002, as it was felt that it would be easier for the department to deal

with one company which is well managed and not with several companies. Some of the firms filed writ petitions in Delhi High Court challenging the clause of the NIT

whereby a condition was put that only such firms which had a turnover of Rs.20 crores or more for the last three financial years would be eligible. It was contended

before the High Court that the aforesaid condition had been incorporated solely with an intent to deprive a large number of companies imparting computer education

from bidding and monopolize the same for big companies. The writ petition was allowed and the clause was struck down as being arbitrary and irrational. In appeal,

this Court reversed the judgment of the High Court basically on the ground that the terms of the invitation to tender are not open to judicial scrutiny, the same being

in the realm of contract and the Government must have a free hand in settling the terms of the tender. The courts would not interfere with the terms of the tender

notice unless it was shown to be either arbitrary or discriminatory or actuated by malice. It was further held that while exercising the power of judicial review of the

terms of the tender notice, the Court cannot order change in them.

The principle is, therefore, well settled that the terms of the invitation to tender are not open to judicial scrutiny and the Courts cannot whittle down the terms of

the tender as they are in the realm of contract unless they are wholly arbitrary, discriminatory or actuated by malice. This being the position of law, settled by a catena

of decisions of this Court, it is rather surprising that the learned Single Judge passed an interim direction on the very first day of admission hearing of the writ petition

and allowed the appellants to deposit the earnest money by furnishing a bank guarantee or a bankers' cheque till three days after the actual date of opening of the

tender. The order of the learned Single Judge being wholly illegal, was, therefore, rightly set aside by the Division Bench.

In view of above, this Court declines interference and dismisses the present petition, sans cost.